Restore Trust in Congress Act
- Sponsor
- Rep. Roy, Chip [R-TX-21]
- Committees
- Committee on House Administration (primary)
- Last action
- Sep 3, 2025
Bottom line
This bill aims to eliminate potential conflicts of interest by banning stock ownership and trading by members of Congress and their immediate families, requiring divestment of existing holdings, and imposing financial penalties for non-compliance.
What it actually does
This bill prohibits Members of Congress, their spouses, and dependent children from owning or trading 'covered investments,' which include stocks, commodities, futures, and derivatives. It mandates divestment of existing holdings within 180 days for current officials and 90 days for new ones, providing a tax deferral mechanism for divestment. The bill also outlines specific exemptions for widely held diversified funds, government bonds, small businesses, and personal residences, and establishes financial penalties and public disclosure requirements for violations.
Proponents argue
Supporters argue this bill is crucial for restoring public trust in Congress by eliminating even the appearance of impropriety, ensuring that elected officials are focused on public service rather than personal financial gain from legislative actions or privileged information. They contend it directly addresses concerns about insider trading and promotes ethical governance.
Opponents contend
Critics might argue that such a broad prohibition infringes on the personal financial freedom of elected officials and their families, potentially deterring qualified individuals from seeking public office. Some may also contend that existing ethics rules and disclosure requirements are sufficient, and that a blanket ban is an overreach that could complicate financial planning for families without genuinely addressing the root causes of corruption.
The bill is relatively short and clearly written, allowing for a thorough understanding within a reasonable timeframe.
Section 2(b), adding new 5 U.S.C. 13152(a)
Ban on Ownership and Trading of Covered Investments
This provision directly prohibits Members of Congress, their spouses, and dependent children (collectively 'covered individuals') from directly or indirectly owning or trading 'covered investments.' These investments include securities, commodities, futures, and comparable economic interests acquired through derivatives, with specific exclusions for certain types of assets.
Supporters argue
Supporters argue this direct prohibition is the most effective way to eliminate conflicts of interest and the appearance of impropriety, ensuring that legislative decisions are made solely for the public good.
Critics contend
Critics might contend that this ban is overly broad, potentially limiting the financial autonomy of individuals who choose to serve in public office and their families, and could discourage qualified individuals from running for Congress.
Tradeoffs
Balances the public's demand for ethical governance against the personal financial freedoms of elected officials and their families.
Section 2(b), adding new 5 U.S.C. 13152(b) and (f)
Mandatory Divestment and Acquisition Rules
This provision mandates that covered individuals divest any existing covered investments at fair market value. For those already in office, divestment must occur within 180 days of the bill's enactment. For individuals becoming covered individuals after enactment (e.g., newly elected members), divestment must occur within 90 days. It also specifies a 90-day divestment period for assets acquired through special circumstances like inheritance or marriage.
Section 2(b), adding new 5 U.S.C. 13152(c)
Tax-Deferred Divestment Certificates
This provision integrates the divestment requirement with Section 1043 of the Internal Revenue Code of 1986, treating the bill as a 'Federal conflict of interest statute.' This allows covered individuals to receive a 'certificate of divestiture' from their supervising ethics office, potentially enabling them to defer capital gains taxes on assets sold to comply with the new rules, provided the proceeds are reinvested in permitted assets.
Section 2(b), adding new 5 U.S.C. 13151(3)(B) and 13152(d)-(f)
Permitted Investments and Exemptions
The bill defines 'covered investment' with several key exclusions: widely held diversified investment funds, U.S. Treasury bills/notes/bonds, State or municipal government bonds, compensation from a spouse's or dependent child's employer, interests in small business concerns, interests in LLCs for personal residences, and specific Alaska Native Settlement Stocks. It also allows spouses/dependent children to trade covered investments if it's part of their primary occupation and not owned by a covered individual. Family trusts meeting specific criteria can also be exempted.
Section 2(b), adding new 5 U.S.C. 13153
Financial Penalties and Public Disclosure
This provision establishes penalties for violating the investment restrictions. Violators must pay a fee equal to ten percent of the value of the covered investment and disgorge any profits from the illicit transaction, with these funds payable to the U.S. Treasury. It also prohibits Members of the House from using their Representational Allowance or campaign contributions to pay these penalties. Supervising ethics offices are required to publish details of all assessed fines, reasons, and results on a public website.
This section defines what is *not* a 'covered investment,' thereby outlining what Members and their families *can* still own or trade. This includes widely held diversified funds, government bonds, small business interests, and personal residence LLCs.
Section 2(b), adding new 5 U.S.C. 13151(3)(B)
Why it matters:This is standard legislative practice to define terms upfront, but the exclusions are critical to understanding the bill's practical impact.
Case for: Supporters argue these exclusions are crucial for practicality, allowing common, low-risk investments and protecting legitimate business interests without creating conflicts.
Case against: Critics might suggest that some exclusions, like 'small business concern,' could be broadly interpreted or exploited, potentially creating loopholes for less transparent investments.
Estimated impact: Significantly narrows the scope of the ban, allowing for continued investment in many common asset classes that are generally considered low-risk for conflicts of interest.
This provision links the mandatory divestment to Section 1043 of the Internal Revenue Code, allowing covered individuals to potentially defer capital gains taxes on assets sold to comply with the ban.
Section 2(b), adding new 5 U.S.C. 13152(c)
Why it matters:Standard legislative practice to leverage existing tax mechanisms for specific policy goals, rather than creating new tax law within this bill.
Case for: Proponents argue this makes the divestment requirement less financially burdensome, ensuring that public service doesn't come with an excessive tax penalty for complying with ethics rules.
Case against: Critics might argue that this tax benefit, while standard for conflict-of-interest divestments, still represents a financial concession to those affected by the ban, rather than a pure cost of public service.
Estimated impact: Could result in a significant deferral of capital gains taxes for divesting individuals, potentially impacting federal tax revenue in the short term, though it's a deferral, not an elimination of tax liability.